What about business credit cards?

legal updates

The surcharge rules are based on how you pay not who you are.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

The new law only applies to consumers and so businesses CAN still be charged fees, but this can only be the amount it costs to process the transaction.

The surcharge rules are based on how you pay not who you are, though. So if you pay with a business credit card you can be charged extra, but if you’re a business owner using your personal credit card you can’t be charged the surcharge.

The problem is working out in advance what the precise cost to the seller will be when another business buys using their business card and so it has to be framed in terms of % of the transaction and must be no greater a percentage imposed by the card provider for that transaction. So a fixed charge for each transaction (regardless of price of goods) is not permitted.

The other issue is for sole traders who buy goods.  The name on the card may be their personal name but it could be a business card but if one is unsure it has to be assumed to be a personal card so no charge.

What cannot happen is our clients saying “the buyer said he was a trade buyer and so we imposed a charge for him using his card.”  As stated above, only if a business credit card is used can you pass on the charges and even then it has to be capped at the precise amount imposed by the card provider. 

This is unhelpful and confusing.  For example is it a trade to trade transaction or a consumer transaction when a business pays for goods by placing a 10% deposit on their business credit card (and a charge is imposed) and the remainder using their personal credit card (where no charge can be imposed) even though the invoice is made out to the business?  

Profit BoxDevelop your people like your business depends on it

What most people don’t know is that talent development doesn’t have to be complicated, high risk or expensive. Once they integrate key development stages, the results can be remarkable. Empower your team. Lead your industry. We’re your strategic learning partner, driving performance by moving skills forward.

Jason WilliamsLegal AdvisorRead More by this author

Related Legal Updates

Consumer credit commission disclosure – have you received a letter?

Letters are being sent to our members requesting they divulge confidential information about commission that was not requested by the customer at the appropriate time.

Historical rejections, finance not romance

Finance company auctioned the vehicle off (massively undervalued) and proceeded to pursue the dealer for the difference!

Chargeback Shenanigans

This can lead to our clients seeing the price of the car disappearing out of their account AND the consumer not returning a car.

MotoNovo

We published an article on our website headlined, “Have you agreed to do MotoNovo’s Dirty Work?”

13 January 2018 – car dealers CANNOT pass on card surcharges to customers

Furthermore, you cannot impose a charge for those who opt to pay by American Express, Paypal, Applepay etc.

Credit card surcharges set to be a thing of the past

In January 2018 it is likely that no surcharges will be passed on for consumer credit cards usage.

Part 2 in the case of the dealer who bought a car which was not HPI finance clear

We were able to fight the case on 2 technicalities and come to a deal with the finance company reducing the liability down from £12,000 to £5000.

Get in touch

Complete the form to get in touch or via our details below:

Phone
01480 455500
Address

Vinpenta House
High Causeway
Whittlesey
Peterborough
PE7 1AE

By submitting this quote you agree to our Terms & Conditions and Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.